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Private interest as public purpose

The Bill to amend the 2013 land acquisition Act is neither pro-farmer nor pro-poor

Next week the economic agenda of the Narendra Modi government will face its biggest test in Parliament. The controversial Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015 (LARR) that has been introduced in Lok Sabha is due for consideration of the house on March 9. While the government seems determined to push the Bill through Parliament, the opposition parties have vowed to oppose it tooth and nail.
The stakes are very high for both sides. Ensuring hassle-free and cheap land to private companies is a crucial component of the economic agenda of the government. The government has made it clear that it will consider only ‘meaningful’ amendments, but will not change the core of the Bill. On the other hand, for opposition parties the Bill offers an opportunity for revival. They want to capitalise on the battle that has been raging outside Parliament.
A foot-march by tens of thousands of farmers, agricultural workers and tribals from 16 States reached Jantar Mantar on February 23 to join a protest launched by Anna Hazare. The social activist has described the ordinance as a grave form of injustice to farmers and others who depend on land for livelihood. Mr. Hazare has made it clear that the current protest is just a beginning of a larger movement that will continue until the anti-farmer Bill was withdrawn.
That many organisations of farmers, agricultural workers and tribals from different parts of the country have started protests is not surprising. Since Independence, millions have been displaced and dispossessed of their livelihood due to land acquisition, and have received a pittance by way of compensation.
Farmers get a pittance
A study I undertook of 1,660 judgments of the Punjab and Haryana High Court, delivered between 2009 and 2011, demonstrates how farmers have been receiving the short end of the stick. It shows that the average government compensation is just about one-fourth of the market value of land. In other words, for a land worth Rs. 1 lakh, on average, the farmer has received Rs. 25,000 and paid a subsidy of Rs. 75,000 to whoever received the land. If this is the case with farmers who could afford costly litigation, what about those too poor to do so?
As to the landless livelihood loser — sharecroppers, labourers, fishermen and artisans — their situation can best be described in the words of Shylock in The Merchant of Venice, Act 4, Scene 1: “You take my life when you do take the means whereby I live.”
Over the years, farmers have lost 1.80 lakh hectares of farm land to acquisition. Many a time, land has been acquired for private companies under the guise of public purpose. Recently, large tracts have been acquired for real-estate developers and the Special Economic Zones (SEZs). The companies have earned huge profits by diverting the acquired land toward commercial activities. Developers in Noida and Gurgaon have made fortunes.
A recent report of the Comptroller and Auditor General of India provides a damning account of misuse of land in SEZs. It concludes: “Land appears to be the most crucial and attractive component of the scheme. Out of 45635.63 ha of land notified in the country for SEZ purposes, operations commenced in only 28488.49 ha of land.” It further adds: “5402.22 ha of land was de-notified and diverted for commercial purposes in several cases. Many tracts of these lands were acquired invoking the ‘public purpose’ clause.”
The LARR Act, 2013 had put paid to such practices. It mandated prior consent of 80 per cent of the affected families for land acquisition for private companies — 70 per cent for PPPs. The consultative and participatory acquisition process under the Act drastically reduced the scope for arbitrary dispossession. Moreover, it made Rehabilitation and Resettlement (R&R) the legal right of the displaced and the livelihood losers.
By scrapping these progressive features, the Bill has legalised dispossession and displacement of people who depend on land, water and forests for their livelihood. It has added a large number of private projects to the exempted list for which land can be acquired without consulting the affected people, never mind their consent. In fact, several changes effected by it have made the acquisition law worse than the colonial Land Acquisition Act (LAA), 1894.
For instance, it has expanded the scope of SEZ-like malpractices by adding ‘Public-private partnerships’ (PPPs) to the exempted list. Ostensibly, these partnerships are formed to tap private funds for the provisions of public goods. However, many of such partnerships are used as means to acquiring land for companies. This is how it works. The government concerned acquires land citing some public purpose and transfers it to the partner companies. Post-acquisition, companies use the land for real-estate and other commercial purposes to make huge profits. Housing projects under PPPs for the Taj and the Ganga expressway projects, and hospitality projects clubbed with Delhi and Mumbai airports are some of the many cases in point.
As if this was not enough, the Bill has abolished the social impact assessment (SIA) for many projects, including SEZs, PPPs, dams, power plants, and waterways. The SIA mandated under LARR, is vital to ensure that the acquisition happens only when it is in the social interest and excess land is not acquired. It also helps reduce the adverse effects of acquisition — in terms of the loss of livelihood and habitat, and damage to the environment. Its importance cannot be overemphasised for large projects.
To be meaningful the R&R requires careful documentation of those who lose their land and livelihood. Under the bill this can be done only as a part of the SIA, which stands scrapped for most projects. Consequently, R&R has been rendered to a mere charade. What a tribute to the Narmada Bachao Andolan!
Misleading claims
The government has sought to justify the Bill by attacking the LARR as anti-development. The Finance Minister, who is the architect of the ordinance, in his blog has criticised the land acquisition process under the Act as: “A highly complicated process of acquisition which renders it difficult or almost impossible to acquire land can hurt India’s development.”
Such claims are completely misleading. The LARR had been in place only for a year and there is no evidence suggesting that project delays increased during this period. On the contrary, data from the Ministry of Statistics and Programme Implementation show that more than 82 per cent of projects suffered delays even under the 1894 Act — the notorious ‘urgency clause’ under this colonial law permitted land acquisition without any scrutiny or hindrance whatsoever. Clearly, several factors other than land acquisition also cause delays.
Also, the government has made much of the increase in compensation; now, it can be two to four times the ‘market rates’. The corporate sector and its sympathiser claim that the increased compensation has rendered many projects unsustainable, threatening the growth prospects. Some UPA leaders also seem to share this view, which is totally baseless, since the officials assess market value using stamp-duty and the sale-deeds rates as proxy. As the above-mentioned study of court cases shows, the latter rates are a fraction of the actual market prices. Therefore, even at two to four times the stamp-duty rates, the compensation will be less than the actual value.
The SIA and the R&R are crucial for ensuring that people get dispossessed and displaced when it is really worth it. Similarly, prior consent of the affected families is a necessary check on the misuse of the eminent domain power of the state. With these provisions absent, how can the bill be pro-farmer and pro-poor?
(Ram Singh is Associate Professor, Department of Economics, Delhi School of Economics.)
Keywords: Land AcquisitionLARRland lawland ordinance

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